For example,witha6pre-paymentfee,iftheborrowerweretorepaytheloanin3months,therewouldbe3extramonthsofinterestdue.Thisconditionisputinplaceso that thelenderreceivesalittlereturnforthetime,hassleandallocationofitsfundsto yourborrower.Iftheloanisrepaidbytheborroweraftersix months,subsequentlynopre-paymentpenaltywillbeissued.

Well besidestheobvious35–40%equitycushion,thelenderwillwanttoseetheextentofworkdescribedwithacostanalysisworksheet and timeline. Thelenderwill usethisashelpful tipsinreleasingcapitalforrehabilitationpurposes. Nothingevergoesasintendedwhenperformingarehab; thereforethelenderwillneedtoseetheborrowersexpertiseinmanaging or performingreal estaterepairs.Thelenderrequireaninspection to be made after each draw is completeandwillreleasefundsindrawsforsuchrepairsthatarelisted. Thelenderwill evenrequireincome statement and a credit reportin theborrowerto showthat theborrowerhastheabilitytorepaytheloan.Nevertheless,hardmoneylendersfocusprimarilyontheassetvalueofthesecurityand notthecreditscore.